After the massive rally on Thursday, investors were in full “buy the dip” mode. Even if a company did not serve up the best third-quarter report, if the stock was in the red, all the better.
The aforementioned scenario applies to Citigroup Inc C, which is the PreMarket Prep Stock of the Day.
Major Rally Off Double Bottom: Citigroup made a new low for the move on Wednesday at $40.05 and rebounded to close at $40.84. On Thursday’s wash out open across the board, Citigroup bottomed only four pennies from that low and roared back to close at $42.95.
Citigroup’s Q3 Report: Before the open Friday, the company announced third-quarter adjusted EPS of $1.50 vs. a $1.42 estimate along with sales of $18.51 billion against an $18.25-billion estimate.
The bank also said: “to be clear, our intention is to wind down our presence” in Russia.
CFO Mark Mason said deals in the pipeline remain quite strong versus pre-pandemic levels.
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For some reason, the good report was not good enough, and the issue was in the red during premarket trading.
PreMarket Prep’s Take: When the issue was being covered on the show Friday, it was trading in the red by 50 cents at the $42.50 area.
“I think you will find buyers today after Thursday’s price action,” said co-host Dennis Dick.
“Money managers that did not deploy capital yesterday will be looking to do that today,” he said. “I would love to buy at yesterday’s low, but I do not think it will get that low.”
The author of this article was looking to “buy the dip” in the issue and targeted the $42 area as a possible entry point with a stop at the recent lows.
C Price Action: Investors stepped in well ahead of the co-host’s possible points of entry. After a slightly higher open, it had a brief dip but found support just under the close ($42.95) at $42.80 and embarked on a significant rally.
In fact, the issue reached its highest level since Oct. 4 when it peaked at $44.75, only reaching $44.42. The stock has since fallen and is trading actively in the $43 handle.
The discussion on the issue from Friday’s show can be found here:
Image and article originally from www.benzinga.com. Read the original article here.